After a not-so-great Q4 earnings report, which sent shares in the company tumbling yesterday, Snap has today revealed some good news, with its monthly active user count now up to 800 million, rising from the 750 million MAU that it reported in February last year.
Well, it’s good in terms of overall figures, but there’s a lot to also be said about how exactly Snap is growing. But we’ll get to that.
As per Snap:
“We're thrilled to share that Snapchat has surpassed 800 million monthly active users! From the beginning, Snapchat was built as an alternative to social media for our community to communicate with friends and family, express themselves, and have fun together. Over the years, we’ve prioritized doing what’s right for our community and stayed true to our values. We’ve continued to focus on helping Snapchatters foster connections with friends and family, rather than building mass networks of people they barely know. And those connections have been shown to make people happier - Snapchatters report higher satisfaction with the quality of friendships and relationships with family than non-Snapchatters, and over 90% of Snapchatters say they feel comfortable, happy and connected when using our service.”
Snap is now pushing this “antidote to social media” line in a new ad campaign, in which it seeks to differentiate itself from other social apps. And with broader online sharing trends leaning more into private messaging, Snap is seemingly in a good position to capitalize on new opportunities, though its actual growth hasn’t been as beneficial as Snap would have hoped.
Because while Snapchat has added 50 million more users in 12 months, almost all of that growth has come from outside of its core revenue markets, in North America and the EU.
As you can see from Snap’s daily active user chart, Snap’s adding very few new users in North America and Europe, but it has added a lot more users in the “Rest of the World” chart, which has been primarily driven by its growth in India.
Snap says that it has been prioritizing growth in the latter segment, in order to expand its future opportunities. But the problem is that developing markets like India generate far less revenue for the company, due to fewer advertisers and lower overall in-app spend.
So while this has made Snap’s growth charts look better, Snap explained in its earnings call yesterday that it’s now going to shift its focus to Europe and North America.
“While we see significant long-term potential for community growth in Rest of World, we are shifting more of our focus toward community growth in our more mature geographies like North America and Europe. Over the past several years, we’ve driven significant growth in DAU by focusing on Android performance in large emerging markets, including India. We will continue to build on our momentum in the APAC region while increasing our investment in improving the product experience for our community in North America and Europe.”
So while it is a positive announcement that Snap’s adding more users, Snap itself admits that the audience growth is a little misleading in terms of driving its overall business success.
And really, overall numbers like this are only indicators of opportunity, it’s down to the business to then capitalize on such, and translate that into broader success. For individual brands, the importance of the audience growth is that it may indicate that your target market is active in the app, but that comes down to your own analytics and research, and understanding where, exactly, your specific marketing focus should be.
Essentially, Snap adding 50 million more users in a year is a positive, in terms of broader trends, but not so much in relation to immediate benefit. And given Snap’s changing focus, that growth could slow in the next year, as it looks to maximize its income potential.